Construction starts fell 1% in October, but the industry continued to show more strength than the overall economy.

The value of new-construction contracts dipped to a seasonally-adjusted annual rate of $490.1 billion, spurred by a steep drop in the building of public works and utilities, according to the latest report from F.W. Dodge, a building-research division of publisher McGraw-Hill Cos. Nonresidential building, especially...